Event Details

Agenda A panel discussion on refurbishment practices’ and ‘managing product returns' to identify and examine current practices and impediments.

About

“In an ideal world, reverse logistics would not exist.” - Jim Whalen

In this far from ideal world, reverse logistics has a major role to play in completing the supply chain loop. Off late, the increasing popularity of eCommerce practices in India has made managing reverse logistics an important element of supply chain management and, in some cases, a profit generating function. This function is subject to a large number of bottlenecks and hurdles that prevent optimal efficiency in execution. The Indian School of Business intends to conduct a panel discussion on refurbishment practices’ and ‘managing product returns’ to identify and examine current practices and impediments. The panel discussion, to be held on 17 Feb at ISB Hyderabad Campus is expected to throw up issues that may seed further research on the subject and bring out positive action points for all stakeholders.

Panel discussions will be conducted on two topics mentioned below:

Topic 1: Managing Product Returns in India:

Retailers have to cope with all kinds of returns—from apparel that just didn't suit the customer, to expired products that are no longer saleable, to recalls endangering public safety. Retailers are devoting more attention and resources to reverse logistics as they seek to extract as much value as possible from returned goods.

Major Players:The major players in this space would be e-retailers like Amazon and Flipkart, consumer protection bureau, sellers unions and logistics service providers like Bluedart etc.Issues:Geographical constraints, poor infrastructure and tax disparities are a few issues. Besides these, some burning issues are:Wretched Returns: Even when legitimately purchased merchandise are returned, retailers are faced with challenges such as product malfunction, missing parts, damaged packaging, and expired perishable merchandise.Omni Channel Boom: Amid this boom in the retail sector, customers expect flexibility in returns as well, to be able to buy from one channel and return through another.Abuse of Returns Policy: While retailers globally allow buyers to return goods within a specified period, online marketplaces in the country are facing an unprecedented rate of wares being sent back, causing them logistical nightmares and potentially larger losses than factored in for product returns. The problem is threatening to become more acute with rapid industry growth.

Government of India’s Stand:Department of Consumer Affairs has proposed to bring e-Commerce businesses under the purview of multiple government agencies. The proposal for final consideration of a Committee of Secretaries (CoS) could bring e-Commerce under the purview of up to nine government agencies and regulatory bodies.Further Discussion:As customer expectations grow higher and competition fiercer, retailers are seeking to simultaneously cut costs and enhance the customer experience. Over the past decade, many have embraced forward logistics as a tool for achieving both goals. Now they're turning their attention to similar opportunities in reverse logistics, both to address customer centricity, omni-channel operations, and regulation, and to extract more value from their returned goods.This inaugural panel discussion is aimed at outlining issues and discussing the position of various stakeholders

Topic 2: Future of Refurbishing in India

Refurbished market in India is not a new concept. It has always existed as an inferior market for years in an unorganized manner. Today the refurbished electronics market is being looked at as a flourishing category that has emerged between the brand new and second-hand product markets.Lots of items fall under the ‘refurbished’ category. For example, sometimes a customer returns a product for a refund without even opening the box or using the item at all. And sometimes electronic goods, IT hardware products, TVs, phones, etc are returned to original equipment manufacturers (OEMs) for minor defects and damages. The companies dispose some of them in sales as seconds-goods, but majority get lapped up by refurbished goods companies who, after removing the defects, sell them. And customer usually gets huge discounts of 30-40% on these products.

Major Players: Refurbishers like GreenDust, Cashify and Reboot are major players.

Issues/Challenges: The biggest issue faced is related to procuring the product from end user. Effective management for product returns calls for robust reverse logistics in place which in turn means investments The other aspect is of quality assurance and warranty for the product. The third is a psychological issue wherein the product may be ‘remanufactured, reconditioned, re assembled refurbished, pre-owned’; it is seen as one class 'second hand' or ‘used' equipment and has the attached stigma to it. There are also other aspects pertaining to environment protection and electronic waste that are viewed with suspicion.

Government of India Policy:In 2014, the Indian government rolled out the Make in India program, with the idea to promote local manufacturing in 25 sectors of various industries, one of them being electronic devices (including smartphones). Coincidently, two years later, when Apple initiated efforts to start importing and selling its refurbished smartphones as a way to increase the iPhone’s market share in the country, these efforts were unsuccessful. The Indian government rejected Apple’s plan, justifying its decision with a concern about the electronic waste increase caused by a deluge of refurbished smartphones entering the country. The government, other than this, has very less of policy in place and issues are dealt in case by case manner.

Points for DiscussionThe panel would discuss issues being faced in integrating refurbishment in logistics supply chain and its future in light of growing ecommerce in the country. Aspects pertaining to its impact on environment will also be considered.